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Assignment On Commodity Trading: (Mustard Seed)
Assignment On Commodity Trading: (Mustard Seed)
Assignment On Commodity Trading: (Mustard Seed)
COMMODITY
TRADING
(MUSTARD SEED)
SUBMITTED BY:
(GROUP NO- 09)
05. ABHISHEK SHARMA
20. BHAVANA REDDY
SUBMITTED TO:
31. BASINA KIRAN KUMAR
MR. CHIRAG BADALA
38. MALATESH OLEKAR
43. NIRANJAN REDDY
64. SUSHREE NAYAK
70. YERRA MANISHA
BASIC AGRONOMY
Mustard seeds (Brassica Napus) also known as Rape, Oilseed rape, Rapeseeds and Canola are
very widely cultivated throughout the world. Mustard is the third most important edible
oilseed crop of the world after soybean and oil palm. It is world’s second leading sources of
protein meal after soybean meal. It belongs to the Family: Brassicaceae (Cruciferae). Two
species of Rapeseed and mustard are Brassica juncea and B. campestris.
Mustard seeds oil content varies from 33% to 46% and average oil recovery is around 32% to
38%. After oil extraction, the remaining part of the seed is used to produce rapeseed/mustard
meal, an important source of cattle and poultry feed.
It is basically a winter crop and it requires a temperate climate to prosper In India they are
grown in Rabi season from September-October to February-March. It should be sown
from the mid to the last week of September. Sowing must be completed in the first fortnight
of October. Mustard is an annual herb with seedlings that emerge rapidly, but then usually
grow slowly. Plants cover the ground in 4 to 5 weeks with favourable moisture and
temperature conditions. Plant height at maturity varies from 30 to 45 in. depending on type,
variety, and environmental conditions. The crop starts flowering in the months of November,
December, January and February. The harvesting period is from February to March. It needs
a right proportion of rainfall during the sowing seasons of the crop
An average yield of mustard is 5 – 6 quintals per acre. But, improved verities and better
agronomic practices may enhance the yields up to 6 – 8 quintals per acre.
USAGE
Yellow mustard is usually used for prepared or table mustard, a condiment, and as dry
mustard. Dry mustard is frequently used as a seasoning in mayonnaise, salad dressings, and
sauces. Flour made from yellow mustard is an excellent emulsifying agent and stabilizer, and
consequently, it is used in sausage preparation. Brown and oriental mustards are also used as
oilseed crops.
Extremely rich in Nitrogen and micronutrients, Mustard Oil cake is an important and quick
acting organic nitrogenous manure. An excellent and high-quality manure input suitable to
be used for a wide variety of plants. It is also used in animal feed.
VALUE CHAIN
Supply
Production
STATES 2010- 2012- 2013- 2013- 2014- 2015- 2016- 2017- 2018-
11 13 14 14 15 16 17 18 19*
Rajasthan 43.70 29.76 38.15 37.97 28.96 32.58 36.45 39.85 41.09
Haryana 9.42 7.47 9.62 8.80 7.06 8.05 9.45 9.54 10.21
Madhya 8.55 8.70 9.19 8.44 7.17 6.66 9.20 9.07 9.41
Pradesh
Uttar Pradesh 7.17 7.26 8.36 7.37 5.82 6.03 8.58 7.82 8.46
West Bengal 4.20 3.81 4.75 4.78 4.80 4.99 4.95 5.47 5.82
All India 81.79 66.04 80.29 78.77 62.82 67.97 79.17 83.22 86.93
Production
Imports
Share
EU
China
2%
3%
15% Canada
36% India
Australia
20%
Ukraine
24%
India imported Mustard-Seed worth USD 241,451.12. Ukraine is one of the largest suppliers
of Mustard-Seed accounting for imports worth USD 158,069.63.
EU-27 accounts to about 34% of worlds RM seed production, others major producers are
China (23%), Canada (19%), India (14%), Australia (3%), Ukraine (2%). India produces 5.5
million MT to7 million MT annually. About 0.15 million MT is retained for sowing and
direct consumption as seed. leaving about 4.8-5.1 million MT for crushing and extracting oil.
Domestically, Rajasthan produces 50% of RM seed, followed by Uttar Pradesh, Punjab &
Haryana, Madhya Pradesh, West Bengal, Gujarat. The consumption of Mustard seed as a
condiment is higher in India compared to that of the world. In India, mustard oil is consumed
largely in Northern States as cooking oil and in Southern India it is used for preservation of
food products.
2014 – 15
S. No State Production (000 Share (%)
Tonnes)
1 Rajasthan 2900.00 46.10
2 Madhya Pradesh 720.00 11.45
3 Haryana 710.00 11.29
4 Uttar Pradesh 580.00 9.22
5 West Bengal 480.00 7.63
2015 – 16
S. No State Production (000 Share (%)
Tonnes)
1 Rajasthan 3270.00 47.95
2 Madhya Pradesh 810.00 11.88
3 Haryana 700.00 10.26
4 Uttar Pradesh 600.00 8.80
5 West Bengal 500.00 7.33
2016 – 17
S. No State Production (000 Share (%)
Tonnes)
1 Rajasthan 3650.00 47.22
2 Madhya Pradesh 950.00 12.29
3 Haryana 920.00 11.90
4 Uttar Pradesh 860.00 11.13
5 West Bengal 490.00 6.34
2017 – 18
S. No State Production (000 Share (%)
Tonnes)
1 Rajasthan 3400.00 40.82
2 Madhya Pradesh 1110.00 13.33
3 Haryana 980.00 11.76
4 Uttar Pradesh 950.00 11.40
5 West Bengal 720.00 8.64
Source: http://apeda.in/agriexchange/India%20Production/India_Productions.aspx?
cat=Agri&hscode=1017
Haryana State Government came up with a portal “MERI FASAL MERA BYORA” for
smooth and hassle- free procurement of mustard seeds from their state farmers. As on March
2, 2020, total 3,86,103 farmers have registered on 'Meri Fasal Mera Byora' portal for mustard
seed crop Rabi 2020-21 covering an area of 17.20 lakh acres
25 percent quantity of total production of mustard seed are procured under the price
support scheme of Government of India on behalf of the NAFED and the remaining quantity
of mustard seed will be procured on behalf of the State Government
MSP
To give guaranteed price and assured market to the farmers and protect them from the price
fluctuations and market imperfections Government announces Minimum Support Prices for
few crops in order to promote the production rate of the crops.
Government has approved increase in MSPs for Rabi crops of 2019 – 20 to be marketed in
Rabi marketing season 2020 – 21. The decision of the Government to increase Rabi MSP
fulfils the commitment to the farmers to provide at least 50% return over cost of production.
The MSP for Mustard is announced to be Rs. 4425/-
Demand
Export
Canada is also the world’s most important exporter of mustard seed, with major market share.
The top exporters of Mustard seeds are Canada ($96.7M), Germany ($23.9M), Russia
($22.5M), Ukraine ($18.1M) and India ($16.4M). Indian mustard seed is exported to Asian
countries fallowed by Europe.
Consumption
Mustard oil is consumed wholly in the domestic market. The demand for the consumption of
mustard/rape seed comes mainly from eastern and northern areas of the country. The arrival
of this crop in the markets is in its peak period during March to May.
The major centres of consumption of its oil are Kolkata, Bihar, Jharkhand and the north-
eastern areas like Assam, Tripura, Sikkim etc. Two forms of mustard oil are traded in the
Indian market namely Kacchi Ghani and Pakki Ghani (expeller oil). This industry constitutes
the small-scale sector that markets the oil in loose form to about 80% and the rest
contribution is made by the organized sector.
Consumption of mustard has been steady, and any growth in the market for mustard has a
direct relationship to population growth. Japan was the primary export market, followed by
Canada and Thailand. All three countries experienced a double-digit decline in mustard
purchases. On the other hand, imports have been increasing steadily. Canada was the main
supplier, followed by India.
The major market for yellow mustard is the North American industry which uses the product
as a condiment, sauces & pastes. Europe is the major market for brown mustard & they use it
as a condiment, often in the form of specialty mustards such as Dijon. Asia is the major
market for mustard seeds for use as spicy cooking oil and condiments in almost every recipe.
As per the IOPEPC market report, we had a 4% decline in the production of Indian Mustard
Seeds for the year 2017-18. This was however also followed with the decline in the demand
for the product across the globe. The Indian mustard production, however, is huge &
sufficient to cater to the need of the Asian market. The estimated produce of Mustard crop for
the year 2018-19 is expected to be 25,000 MT of which 90% crop is utilized in the country
itself for oil making purpose. The rest 10% crop will be available for export across all
continents.
The major importing countries for the Indian Mustard seeds are the Asian countries followed
by Europe. The Indian Mustard is mainly used for oil extraction. It is not used to make sauce
or mustard pastes owing to its slightly bitter taste. Considering this trend, we expect the
Indian crop will be able to fulfil the global demands. The Indian government lately has
analysed the global mustard demand & accordingly is taking measures to improve the quality
of seeds so that they are compatible to the taste as required in different cuisines.
GOVERNMENT PROCUREMENT
The Government policy of procurement of Food grains has broad objectives of ensuring MSP
to the farmers and availability of food grains to the weaker sections at affordable prices. It
also ensures effective market intervention thereby keeping the prices under check and also
adding to the overall food security of the country.
HAFED is one of the State procuring agencies for Procurement of Food grains for Central
Pool with the largest share among all the Procuring Agencies. Haryana produces more than
10 million tons of Food Grains with surplus both in Wheat & Paddy. HAFED is involved in
Procurement of Wheat, Paddy, Mustard Seeds, Barley & Bajra on Minimum Support Price.
At present there is a network of 367 mandis/ purchase centres in the State. However, as per
need new mandi/ purchase centres can be opened in case basic amenities are provided by the
Haryana State Agricultural Marketing Board and fulfilling the norms prescribed by the Food
& Supplies Department.
Haryana Co-operation Minister, Banwari Lal said that the State Government is making all
necessary arrangements for smooth and hassle-free procurement of mustard seed of the State
farmers. He said that as on March 2, 2020, total 3,86,103 farmers have registered on 'Meri
Fasal Mera Byora' portal for mustard seed crop Rabi 2020-21 covering an area of 17.20 lakh
acres.
Analysis of Future Contract (NCDEX)
RMSEED have considerable price volatility in the physical market as well as futures.
Exchange traded RMSEED futures are ideal for price risk management needs of the
processors, traders, physical participants and end users. Those with no physical exposure to
RMSEED trade can also benefited by undertaking 'cash-and-carry' arbitrage and 'calendar
spread'.
Speculators can take directional view on future prices and accordingly take positions in
RMSEED seed futures.
Jaipur is the basis centre for RMSEED. Alwar, Kota, Sriganga Nagar, Bikaner, Agra &
Hapur as a additional delivery centres
Rapeseed/Mustard Seed/Canola futures gets traded on NCDEX India in the name of
Rapeseed-Mustard Seed futures; it also gets traded internationally on two exchanges:
ICEX India
Symbol RAPES
Delivery Center Patan
Additional delivery Centers Palanpur, Disa, Dhanera, Sidhpur, Unjha,
Mehsana, Kadi, Bhabhar, Hariz, Talod,
Himatnagar, Bhuj, Rajkot, Halwad, Dhoraji
NCDEX
Symbol RAPES
Delivery Center Jaipur
Additional delivery Centers Agra, Alwar, Bikaner, Jodhpur, Kota,
Sriganganagar, Tonk
Authority
Unit of Trading
The unit of trading shall be 10 MT. Bids and offers may be accepted in lots of 10 MT or in
multiples thereof.
Months Traded In
Basis Price
The basis price of Rapeseed-Mustard seed shall be Ex-warehouse Jaipur, exclusive of Sales
taxes/VAT.
The unit of price quotation for Rapeseed-Mustard seed shall be in Rupees per Quintal. The
basis for Rapeseed-Mustard seed traded as Rapeseed-Mustard seed is Ex-warehouse Jaipur,
exclusive of sales taxes/VAT.
Hours of Trading
The hours of trading for futures in Rapeseed-Mustard seed shall be as follows: As notified by
the Exchange from time to time, currently
Last day of trading shall be 20th day of the delivery month, if 20th day of the delivery month
happens to be a holiday, a Saturday, or a Sunday then the due date shall be the immediately
preceding trading day of the Exchange.
Mark to Market
Harvested Area
Harvested Area
6000000
4000000
2000000
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2018-2019 - 9256 - -
2019-2020# - 9113 - -
2022* 7.47** 11.95*** 1.6^ -
^ :
Tonne/Hectare.
* : Anticipated Figures.
** : Million
Hectare.
*** : Million
Tonne.
Selected State-wise Area, Production and Productivity of Rapeseed and Mustard in India
(2016-2017 and 2017-2018)
Sources